Vodafone to launch a mobile wallet, a startup mines the science of shopper behavior, and a kickstarter campaign to bring NFC to iOS.

Here are a few stories that caught my attention in the commerce space this week.

Vodafone partners up to launch a new mobile wallet platform

Yet another mobile wallet is gearing up to hit the market in 2013. Vodafone announced a partnership with m-commerce company CorFire and digital security company Gemalto to launch the platform in the first quarter of 2013 in Germany and Spain with plans to expand across Europe, according to a report at Bloomberg.

Natasha Lomas at TechCrunch reports that the initial rollout will focus on NFC-equipped Android devices and that the services “will be compatible with the standards chosen by Weve” (formerly known as Project Oscar). According to Lomas, Dr. Jae Chung, CorFire’s president and CEO, noted the platform’s potential in a released statement: “Vodafone’s customer base spans across more than 30 countries, which means our partnership may become one of the biggest, global implementations of NFC and mobile commerce.”

James Wester at Mobile Payments Today reports that Vodafone’s plan for its more than 400 million subscribers around the globe goes beyond the mobile wallet — plans include developing the platform so that third-party service providers can access the subscriber base.

Square made a couple of big move announcements this week. First, the company literally will move to a new office space in the Central Market area of San Francisco by mid-2013, according to a report by Leena Rao at TechCrunch. Rao notes that the company has grown to more than 400 employees and reports Square plans to expand its staff to almost 1,000 people before the end of 2013.

Square also announced this week that its service is now available in Canada, at the same 2.75% rate it charges in the U.S., according to a report by Ingrid Lunden at TechCrunch. Lunden reports one of the obstacles for Square in Canadian as well as European markets is that its dongle depends on the magnetic stripe on the backs of credit cards; many credit card processes in these markets use a chip-and-pin system instead.

The obstacle isn’t insurmountable, however, as Lunden notes, Square’s partnership with Starbucks to incorporate its Pay With Square app service as a mode of payment might pave the way forward with retailers in other markets, making the card processing format irrelevant.

Square competitor PayPal Here was on the move this week as well — into retail shopping. Rao reports in a separate post at TechCrunch that PayPal CEO John Donahoe announced a U.S. retail deal with AT&T during eBay’s earning call this week. PayPal Here previously had a retail presence only in Japan with Softbank. Rao reports that Here will retail for $15, with the purchaser receiving a $15 discount upon signing up; Square is sold in 20,000 outlets in the U.S. and sells for $10, with a $10 purchaser sign-up discount, Rao reports.

Here are a few stories that caught my attention in the commerce space this week.

Strategic maneuvers aimed at Amazon

Retail competition against Amazon is starting to heat up coming into the holiday shopping season. On the heels of Wal-Mart’s recent moves to square off against Amazon, two other big box brick-and-mortar retailers have announced strategies targeting the Internet retail giant.

Ann Zimmerman reports at The Wall Street Journal that Best Buy not only will price match with Amazon this holiday season, but will also offer free delivery for products that are out of stock. Target has its sights set against Amazon as well. In a report on Target’s planned holiday strategy, Natalie Zmuda at AgeAge notes that tactics include “a price-match guarantee against a group of competitors that includes popular online retailers such as Amazon.” Target also is using QR codes in its holiday campaign to combat “showrooming” on the top 20 selling toys.

In somewhat related news, the US Post Office also is making moves into the e-commerce market. Victoria Stilwell reports at Bloomberg that starting in November, the US Post Office will begin testing its same-day delivery program, called Metro Post, in the San Francisco market. The service is aimed at local physical retailers, which could in turn give them a leg up against Internet retailers like Amazon. Stilwell reports that to participate in the Metro Post test, retailers need 10 or more physical locations throughout the US, with one or more within the test market boundaries.

Square cab fares, Wal-Mart looks to beat Amazon to the same-day punch, and a major player update in the mobile payments war.

Here are a few stories that caught my attention in the commerce space this week.

Square may be courting cabs

Square not only is gearing up to launch in Starbucks stores in November — it may also be looking to enter the New York City taxi cab market. Ryan Mac reports at Forbes this week that negotiations may be underway:

“Late Monday, private company expert PrivCo said that the San Francisco-based startup and the city of New York will be announcing an official partnership with the city of New York to implement Square’s payment systems across the city’s cabs. If negotiations are completed as expected, said New York City-based PrivCo, the partnership may be announced as early as this month.”

Mac reports that neither Square nor New York City’s Taxi & Limousine Commission (TLC) would confirm that a deal was in place, but he notes Square has been testing iPad credit card swipers with TLC since March.

As to its forthcoming foray into Starbucks, Lisa Baertlein at Reuters reports that further innovations are in the works even ahead of the launch. At launch, customers will be able to pay for a coffee by having a barcode scanned off a smartphone, but plans are already in the works to use Square’s GPS to identify a customer in a Starbucks location, who can then pay by giving his or her name to the cashier. Also, Cliff Burrows, president of Starbucks’ Americas region, told Baertlein that by summer 2013, customers will have the option and ability to tip using the technology.

MCX’s mobile payment vision draws in more big names

The Merchant Customer Exchange (MCX) got a boost this week as several more big brands joined the mobile payments network. Nivedita Bhattacharjee reports at Reuters that the new members include Gap, Bed Bath & Beyond, Dillard’s and Dunkin’ Brands, bringing the total to 21 publicly traded members to date.

James Wester at Mobile Payments Today notes that a merchants mobile payment solution doesn’t yet exist and no launch date has been announced. Wester reports:

“MCX said its platform is under development and the company is trying to focus on integrating payments with offers and promotions delivered to a smartphone. But a source familiar with MCX’s effort said the consortium is still working through an RFP process to find technology vendors to help bring its solution to market.”

Wester says MCX officials described the vision for the payment solution as including discounts and promotions, and requiring little involvement from merchants in terms of equipment and technology investments. The platform also reportedly will “take a ‘hands-off’ approach to retailer’s transaction and customer data,” which is a major factor in some retailers choosing MCX over other payment options, such as Google Wallet. Mike Cook, vice president and assistant treasurer at Wal-Mart, one of the MCX partners, made it clear this week that Wal-Mart is not interested in sharing consumer and transaction data and that that played a role in the company choosing to back MCX over Google or Isis.

Retailers in Passbook, chaos in the payment space, and the importance of the mobile shopping experience.

Passbook’s early merchants

Apple’s iOS 6 launched last week, bringing the Passbook feature to iPhones, and merchants from all walks of industry have started jumping on board. Target was among the first to push its app update, and Sarah Perez at TechCrunch argues it will be one of the most influential merchants in making mobile wallets mainstream. Perez notes the practical nature of Target’s app, as it focuses on saving and storing mobile coupons. Mobile coupons are nothing new, of course, but Perez argues, “becoming part of a more comprehensive system — one that even pushes you reminder notifications as you walk into a store — it has the potential to actually change user behavior” (e.g. make consumers more comfortable and intimate with their phones as part of the shopping experience).

Perez also looks at startup gift card company Gyft’s new Passbook integration in a separate post. The company sells cards from more than 200 retailers, and for those with which it has a relationship, the app will allow users to check gift card balances, too. The integration also is on a per-card basis, so each card must be transferred into Gyft individually, but Perez says it’s worth the trouble: “instead of having a generic ‘Gyft’ card stored in the Passbook app, you’ll have what appears to be the individual store gift cards there, powered by Gyft.” Perez also looks at a few other startups that were agile enough to jump on board early, ahead of many major brands, including Belly and SnipSnap.

One of the more surprising of the major brands to be slow off the mark is Starbucks. Alex Heath at Cult of Mac reports that the Starbucks app will be updated by the end of the month and points out why it’s such a surprise the coffee mogul is late to the game. Not only is Starbucks mobile savvy with its Square payment integration, but “Apple originally routed Passbook in the iOS 6 developer betas to the Starbucks app in the App Store,” Heath writes.

A few of the other major brands already on board with Passbook include Walgreens, Ticketmaster, Fandango, Sephora and several Major League Baseball teams. To give Passbook a whirl in the real world, Josh Lowensohn at CNET took it to a Major League game. He writes that he was able to get into the game by having his ticket scanned off his phone but that the experience wasn’t completely paperless: “In order to give Passbook users some sort of proof of purchase, the stadium prints out a paper receipt that you need to hold on to. … The stadium also requires those with higher level tickets, to somewhere like the suite levels, to carry an extra paper ticket.”

Big data and mobile are changing retail. NFC? Not so much.

Here are a few stories from the commerce space that caught my attention this week:

Mom and pops sidelined by big data?

Gary Hawkins at the Harvard Business Review took a look this week at marketing and research in the commerce space and argued that the costs associated with big data advantages may be wiping out the little guy. Hawkins writes:

“In this war for customers, the ammunition is data — and lots of it. It began with transaction data and shopper data, which remain central. Now, however, they are being augmented by demographic data, in-store video monitoring, mobile-based location data from inside and outside the store, real-time social media feeds, third-party data appends, weather, and more. Retail has entered the era of Big Data.”

Hawkins points out that this level of consumer intelligence is highly advantageous and even more expensive, thus only retailers with adequate resources (read: deep, deep pockets) can compete. Citing a study (PDF) by the Grocery Manufacturers Association, he notes that “annual industry spending on shopper marketing at over $50 billion, and growing.”

In addition to sidelining smaller retailers, the shopper marketing trend is having a more pervasive effect on the industry as a whole by changing the distribution of budgeted marketing expenditures. “Trade promotion accounted for 44% of total marketing expenditures by manufacturers in 2011, lower than any other year in the past decade,” Hawkins notes. The reason for the shift is all about the ROI — quoting Matthew Boyle of CNN Money, Hawkins writes that “the partnership of Kroger and dunnhumby ‘is generating millions in revenue by selling Kroger’s shopper data to consumer goods giants’ … It is widely understood that Kroger is realizing over $100 million annually in incremental revenue from these efforts.”

This model not only caters to large retailers over smaller retailers because of the size of their wallets, but because it’s easier for brands to interact with the corporate headquarters of a major retailer with 1,000 stores than to interact with 1,000 owners of independent stores, Hawkins writes. He goes into detail about how this business model will affect the industry on several fronts — you can read his piece in its entirety here.

“Apple Senior VP Phil Schiller said that Passbook alone does what most customers want and works without existing merchant payment systems. It’s not clear that NFC is the solution to any current problem, Schiller said. ‘Passbook does the kinds of things customers need today’.”

Schiller’s sentiments echoed those made by Square COO Keith Rabois last year, that NFC is “a technology in search of a value proposition.” Cotton Delo at AdAge reported on Apple’s decision to forego NFC and side step the mobile wallet arena and noted that it’s not likely to have any ill effects on the mobile shopping ecosystem, as there is plenty of competition in the space to advance mobile wallet technology.

All the same, advancement in technology doesn’t necessarily translate into ubiquitous adoption, and the decision not to include the technology could have ramifications beyond mobile payments. Ryan Kim at GigaOm argues that Apple’s “snub” was a big detriment for NFC, that including it on “the most popular phone” would have educated consumers and brought a level of validation the technology hasn’t yet experienced. Kim also highlights the bigger issue:

“NFC is much more than just payments and can facilitate personal media and information sharing, building access, marketing and easy Bluetooth pairing. Google, BlackBerry, Nokia and Samsung have all shown different ways in which NFC can be used. But without many common applications that can work between those devices, there’s fewer chances for people to really adopt the technology. With a new iPhone likely to be a best seller, there would have been a lot of ways for people to get acquainted with NFC-actions. Now, the promise of NFC will still struggle to be fulfilled for at least another year.”

Don't toss out your leather wallet just yet, Wal-Mart is innovating, and Project Oscar is a go.

Here are a few stories that caught my attention this week in the commerce space.

Gimmick to mainstream — the difference a decade can make

With Square teaming up with Starbucks, PayPal partnering with major chains like Home Depot and McDonald’s, and all the hype and speculation around the new iPhone having or not having NFC to facilitate payments for Passbook, mobile payments are getting a lot of ink. But when will mobile payments be fully mainstream? Not for at least 10 years, writes Christina Bonnington this week at Wired. Bonnington points to slow adoption and infrastructure holdups as the major bottlenecks:

“Forrester Research estimates only one-fourth of U.S. consumers will own an NFC-enabled phone by 2016, with 100 million shipping in 2012. Until a solid majority of consumers own such devices, merchants have little incentive to create an infrastructure as receptive to smartphone payments as it is to cash and credit cards.”

Bonnington notes that credit card companies are pushing for merchants to upgrade their systems to accept contactless payments, but as analyst Mark Hung told her, this alone could take up to a decade. Bonnington points out that even after that happens, mainstream mobile payments will still face obstacles similar to those that credit card payments face now: competing platforms that force consumers to carry multiple credit cards to accommodate merchants who accept MasterCard and Visa but not Discover, for instance. Imagine a merchant accepting PayPal and whatever Apple develops but not Google Wallet or Isis. Adding to the chaos, processing fee distribution between banks and hardware/software developers will need to be sorted out, she says, as will agreements on how data gathered via mobile payment will be handled.

In a similar vein, Chris Ziegler at The Verge also argued this week that mobile payments are not ripe for the mainstream and pointed to the ultimate hurdle: consumer frustration and distrust. Ziegler shares a personal experience that highlights the cumulative result of the issues Bonnington noted together with the unreliability of cellular networks: even mobile payments in stores that are set up to accept them don’t always work. Until mobile payments become as reliable and ubiquitous as cash and credit cards, he argues, they’ll remain a gimmick.

Google gears up to compete with Apple, a look at the effect of technology on currency, and a wallet competition roundup.

Here are a few stories from the commerce space that caught my attention this week.

Google prepares its Wallet to compete with iOS 6

Robin Dua, Google’s head of product management for Google Wallet, participated in a video interview (embedded below) this week to talk about Wallet features and plans. Technology reporter Cromwell Schubarth notes in a post at Silicon Valley Biz Blog that the future plans for Google Wallet look a lot like Apple’s newly announced Passbook that’s due to release in iOS 6 this fall. Schubarth quotes Dua:

“‘One of the types of things we’re trying to do is make it easy for airlines, transit providers, and other types of issuers of credentials to make it super simple for them to get their credentials stored in the wallet,’ Dua said. ‘That’s the goal. We want you to be able to leave your leather wallet at home and carry your phone and transact with that as your primary transaction device.”

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